Lenders to Aircel are keen on a lump sum sale to a single party as they believe such a move would lead to the best outcome
Mumbai/New Delhi: Bharti Airtel Ltd, Reliance Jio Infocomm Ltd, Sterlite Technologies Ltd and two investment firms have bid to separately purchase assets of Aircel Ltd, but lenders to the bankrupt telecom operator may still have to take a large haircut. Lenders to Aircel are, however, keen on a lump sum sale to a single party as it believes such a move would lead to the best outcome, two people with knowledge of the matter said. Both declined to be named.
“The bids have been received. But we are thinking of the possibility of a lump sum sale, that is, give all of the assets to a single party. This should get better value for the assets," said one of the two people cited before. “In a couple of days, these talks should happen. We are hoping to get over ₹ 25,000 crore from asset sale proceeds."
Aircel Cellular Ltd and Dishnet Wireless Ltd, together known as Aircel, owe about ₹ 50,000 crore to creditors. The companies owe ₹ 15,545 crore to financial creditors, and about ₹ 35,000 crore to operational creditors. Bids for the assets closed on Monday.
Hammered by intense competition in the domestic telecom market, Aircel’s woes multiplied with the entry of Reliance Jio Infocomm Ltd in September 2016 with free calls and cheap data.
Things turned sour last October when Reliance Communications called off plans to merge its wireless business with Aircel, citing legal and regulatory uncertainties, as well as “intervention of vested interests to derail the deal".
Aircel holds 65 MHz spectrum in the 2,100 MHz band, 103 MHz spectrum in the 1,800 MHz band, and 21 MHz spectrum in the 900 MHz band. Details of other assets such as fibre and towers could not be ascertained immediately.
The assets, including spectrum licences and fibre, are valued at about ₹ 32,362 crore, Aircel’s lawyer said on 9 March.
A potential raising of more than ₹ 25,000 crore from the sale of Aircel’s assets would lead to a massive haircut to its lenders such as State Bank of India, Punjab National Bank and Bank of Baroda.
India’s second-largest telecom operator, Bharti Airtel, is the sole bidder for Aircel’s spectrum assets, while Jio is the sole bidder for the telecom towers, said the second person.
The person added that Jio is also in the fray for Aircel’s fibre assets, along with Anil Agarwal-promoted Sterlite Industries, private equity firm I Squared Capital, and distressed asset fund Aion Capital.
Sterlite denied placing a bid for Aircel’s fibre assets. Jio, Airtel and I Squared Capital did not respond to queries till press time. Aion Capital declined to comment.
“Deloitte is very happy with the outcome, which exceeded everyone’s expectations. We will know final decisions on winners probably in four weeks’ time... the bids were being opened on Wednesday," the second person said.
Vijay Kumar Iyer of Deloitte, who has been nominated as the interim resolution professional, didn’t respond to calls.
Airtel, currently the sole bidder for spectrum, had in April 2016, announced buying spectrum worth ₹ 3,500 crore from Aircel in eight telecom circles: Tamil Nadu (including Chennai), Bihar, Jammu and Kashmir, West Bengal, Assam, the North-East, Orissa and Andhra Pradesh.
In 2010, Aircel sold 17,500 towers and 21,000 tenancies to Chennai Network Infrastructure Ltd, a unit of GTL Infrastructure Ltd, for ₹ 8,000 crore.
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